Australian consumers regain confidence in credit card spending
Figures that have been recently released by the Reserve Bank of Australia have suggested that consumers in Australia are regaining confidence in credit card spending.
Over the past twelve months many consumers in Australia have become increasingly concerned about using their credit cards for spending given the volatile financial climate, and this has led to many consumers curbing their spending and trying to cut back on debt by focussing on paying off their credit cards rather than spending on them.
However, the Reserve Bank of Australia has recently released figures that suggest consumer confidence in credit card spending has started to increase in Australia, with borrowers having spent significantly more on their plastic in the run up to Christmas. The figures show that in the month of December the level of credit card spending increased by nearly ten and a half percent compared to November.
The increase in credit card spending for the month meant that in December consumers spent just over twenty two billion dollars on their credit cards, whereas in November the figure was just over twenty billion. No doubt the festive season will have contributed to this increase in spending, but the figures also suggest that confidence amongst consumers is returning when it comes to credit card spending.
An official from Moody’s Economy stated: “The severe tightening of belts that consumers were supposedly doing world-wide doesn’t necessarily seem to be witnessed here in Australia. You look at statistics like this and it’s always a cause for concern.” He added that consumers seemed to have taken the RBA’s recent base rate increases in their stride, adding: “Coupled with strong employment growth in January, recent data suggests the RBA can be increasingly confident it can press ahead with its monetary tightening agenda without derailing the recovery in domestic activity.”
Source - SMH.com.au